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Owen Diaz, the black former elevator operator at Tesla’s Fremont plant, has seen his payout in a racial bias lawsuit fall from $15 million to $3.2 million.
Monday’s verdict from a federal jury in San Francisco came after a week-long trial in which Tesla was found to have again failed to prevent serious racial harassment at its main assembly plant. The EV maker has been ordered to pay Diaz, who worked at the plant as an elevator operator, $175,000 in damages for emotional distress and $3 million in punitive damages designed to punish unlawful behavior and deter future cases.
Diaz first sued Tesla in 2017, claiming the company failed to act when he repeatedly complained to managers about employees often calling him racial slurs and drawing swastikas and racist caricatures on walls and workspaces. Another jury awarded Diaz $137 million in 2021. Tesla challenged the verdict, prompting a new lawsuit. In June 2022, U.S. District Judge William Orrick reduced the award to $15 million, saying at the time that the jury award was excessive. Diaz and his attorneys rejected the $15 million, which includes $1.5 million in compensatory damages and $13.5 million in punitive damages, claiming it was unfair and would not deter future Tesla misconduct.
Going back to court was a gamble for Diaz that didn’t pay off. Monday’s jury verdict comes as a huge blow not only to Diaz, but also to civil rights activists seeking to increase punitive damages for companies proven to tolerate discrimination.
“It’s always very difficult to retry a lawsuit and get similar results as before,” Ryan Saba, a civil litigation and litigation attorney and partner at Rosen Saba, told TechCrunch. “In the first case, the jury was armed with a great deal of evidence of Tesla’s alleged misconduct toward Mr. Diaz. In the second case, that incendiary evidence was not presented to the jury. And so the hushed verdict was probably because the jury didn’t get to hear as much as its liability in its first year.”
In other words, last week’s trial was not designed to determine whether Tesla was liable. Previous investigations have already shown that Tesla failed to prevent racial harassment at the Fremont factory. The retrial was designed to determine an appropriate payoff, and resulted in less evidence being presented at trial, which was due in part to Orrick’s ban on introducing new evidence in the case.
Bernard Alexander, a lawyer for Diaz, on Friday urged jurors to award him nearly $160 million in damages, sending a message to Tesla and other big companies that they won’t just get away with a slap on the wrist if they not address discrimination. Diaz’s testimony last week included a tearful account of several incidents at the factory during the nine months he worked there. The plaintiff said the job made him anxious and caused a strained relationship with his son, who also worked at the factory.
Tesla’s attorney, Alex Spiro, told the jury that Diaz was a confrontational worker who exaggerated claims of emotional distress. Spiro said Diaz’s lawyers have provided no evidence of any long-term damage caused by Tesla. He also said that Diaz did not file any written complaints with regulators. Diaz testified that he had verbally communicated his grief to lawyers numerous times and discussed complaints with human resources officers.
Tesla could not be reached for comment, but has denied wrongdoing in the past. The company faces a number of similar lawsuits for tolerating racial and sexual harassment, including one from California’s Civil Rights Department.
“This case is far from over.”
Diaz’s lawyers sought to file a mistrial motion on Friday, alleging that Tesla’s team violated Orrick’s ban on submitting new evidence when they questioned Diaz and other witnesses about incidents in which Diaz allegedly racially or sexually abused the police. made comments. Orrick denied the motion, saying Diaz’s lawyers failed to show that the questioning had biased the jury.
That doesn’t mean this case is over for either side. Saba said he expects occasional appeals here. Diaz’s attorneys will likely file a post-trial motion to request a new trial on the same grounds as their motion for a mistrial.
Likewise, he expects Tesla to file a motion after the trial to reduce punitive damages, saying $3 million is “quite an outrageous amount compared to $175,000.” Saba noted that punitive damages are usually about 4x the amount awarded for emotional damages.
“This case is far from over.”
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